Warrington v AIG Insurance Limited
[2015] NZHC 408
•27 March 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-2500 [2015] NZHC 408
BETWEEN ROXANNE WARRINGTON
Plaintiff
AND
AIG INSURANCE LIMITED Defendant
Hearing: 23 February 2015 Counsel:
G A Paine for the Plaintiff
H K Harkess for the DefendantJudgment:
27 March 2015
JUDGMENT OF HINTON J
This judgment is delivered by me on 27 March 2015 at 4 pm pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
WARRINGTON v AIG INSURANCE LTD [2015] NZHC 408 [27 March 2015]
Introduction
[1] This is an application for summary judgment for enforcement of a travel insurance contract between the plaintiff and the defendant.
[2] The main question at issue is whether the plaintiff was a “permanent New Zealand resident” as required for cover under the policy, in terms of both a condition precedent and an exclusion clause.
Background
[3] The background set out below is as it currently appears from the affidavits filed.
[4] The relevant travel insurance policy (“the third policy”) was entered into in
July 2013.
[5] Several years before, in May 2011, the plaintiff had met a touring American musician, Tom Warrington, who was a Professor of Music at the University of Nevada, Las Vegas. The plaintiff worked as an overseas deployment co-ordinator with the New Zealand Police Force in Wellington.
[6] In August 2011 the plaintiff travelled to the United States to visit
Mr Warrington.
[7] In November 2011 the defendant says the plaintiff sold her house in
Wellington.
[8] On 14 December 2011, the plaintiff took out a travel insurance policy with the defendant which covered the period to 20 March 2012 (the first policy). Around that time the plaintiff took leave without pay and travelled again to visit Mr Warrington, staying at his house in North Hollywood, California.
[9] On 24 December 2011 the plaintiff and Mr Warrington became engaged and they remained in Mr Warrington’s home in North Hollywood for the next three months or so.
[10] In late March 2012 the plaintiff returned to New Zealand. She pleads that she came back to resume her job. The defendant says that in March 2012, the plaintiff took one year’s leave of absence from her job with the New Zealand Police Force, i.e. through until March 2013.
[11] In late May 2012 Mr Warrington came to New Zealand and stayed with the plaintiff in the plaintiff’s sister’s house in Otaki.
[12] On 15 June 2012 the plaintiff and Mr Warrington married in Otaki.
[13] In July 2012 the plaintiff bought a second policy with an end date of
19 January 2013. The defendant says that the plaintiff and Mr Warrington then returned to the United States, the plaintiff on a visitor visa through until February
2013. She applied for a taxpayer identification number in the United States.
[14] In August 2012 Mr Warrington returned to his job as a professor with the
University of Nevada.
[15] On 1 March 2013 the plaintiff wrote from Mr Warrington’s North Hollywood address giving “formal notice” of resignation to the New Zealand Police. Her letter stated that she and Mr Warrington had decided to stay in the United States “for a while and after contemplating which direction to take, we have finally made up our minds. I’m going for the green card.”
[16] In June 2013, the United States Government issued a green card to the plaintiff.
[17] The plaintiff obtained several time extensions for the second policy, through to 18 July 2013.
[18] In July 2013 (having been in the United States for about a year), the plaintiff and Mr Warrington returned to New Zealand. While in New Zealand, the plaintiff tried to buy a further policy for 12 months cover and says she advised the defendant she would be “travelling with her husband while he finished his final year as a professor at UNLV”. The plaintiff says the defendant advised her she could not take
out cover for a year but it could provide cover for 299 days (i.e. to about May 2014). The plaintiff took out cover on that basis and that is the third insurance policy.
[19] In August 2013, the plaintiff and Mr Warrington returned to the United
States. The defendant says that the plaintiff was travelling on a one-way ticket.
[20] On 5 October 2013 the plaintiff went into cardiac arrest in the United States and her husband advised the defendant of an emergency claim under the third policy.
[21] On 7 October 2013, according to the plaintiff, there was a teleconference between her New Zealand doctor and the defendant during which the defendant and the plaintiff’s cardiologist agreed that an ICD (implanted cardioverter defibrillator) would be implanted.
[22] On 8 October 2013 the plaintiff was duly operated upon and she was in hospital until 10 October 2013.
[23] In October and November 2013 the plaintiff’s New Zealand relations travelled to care for her.
[24] On 11 November 2013 the defendant recommended to the plaintiff that she return to New Zealand, despite the monitor relating to the ICD not working in New Zealand, because of cost implications of remaining in the United States. The plaintiff was told that if she did not return, the defendant would terminate the insurance cover. There seems to be no dispute that the defendant was entitled to take this step.
[25] On 14 November 2013 the plaintiff declined to return to New Zealand and accepted termination of the policy. She says she did so because her monitor was not available in New Zealand. The defendant says the plaintiff first said she did not want to be separated from her husband and subsequently said she would not go to New Zealand because the monitor was not available there.
[26] The defendant paid some of the plaintiff’s U.S. medical accounts, to the tune of approximately $12,000.
[27] On 14 November 2013 (the same date as the policy was terminated) the defendant commenced an investigation of the plaintiff’s claim. The defendant’s investigator visited the plaintiff on 21 November 2013. There is a transcript of that interview as it was tape recorded with the plaintiff’s consent. It seems that the plaintiff encouraged the defendant to visit the room that she still had in New Zealand at the time.
[28] In January 2014 the defendant advised that it would not accept cover for the plaintiff’s medical expenses incurred in October 2013, on the grounds that the plaintiff was not a permanent New Zealand resident at the time she took out the third policy and/or that she was not at the time of the cardiac arrest. This left the plaintiff having to pay the bulk of her medical expenses in the United States, which I was advised total approximately $200,000. I am uncertain which currency is applicable.
[29] In June 2014 the plaintiff and her husband returned to New Zealand and rented a property in Otaki, from which I was advised they may have since moved to another location. The plaintiff has returned to work for the New Zealand Police and Mr Warrington is teaching at the New Zealand School of Music. It is not clear whether Mr Warrington still has a position with the University of Nevada.
Submissions in this hearing
[30] The plaintiff is seeking summary judgment for liability.
[31] The parties are agreed as to the applicable legal principles on a summary judgment application. The onus is on the plaintiff to satisfy the court that the defendant has no fairly arguable defence to her claim.1 Summary judgment is “wholly unsuitable for the determination of disputed questions of fact”.2 The courts however have repeatedly stated that in assessing the strength of a claim or a defence,
the court need not accept uncritically evidence that is inherently lacking in
credibility.3 Finally, the court should take a relatively robust approach to the
1 Pemberton v Chappell [1987] 1 NZLR 1 (CA).
2 Sims v Lowe [1988] 1 NZLR 656 (CA).
3 Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162.
determination, or else there would be little point in having a summary judgment procedure.4
[32] The plaintiff claims as a first cause of action that the defendant breached the third policy insurance contract by not making payment of all of the medical bills incurred by the plaintiff in the United States.
[33] Secondly, the plaintiff says that by terminating the insurance contract on 14
November 2013 the defendant affirmed the contract.
[34] Third, the plaintiff says that the defendant acted in breach of the Fair Trading Act 1986 by confirming to the plaintiff ’s medical team that they could continue with her medical treatment and by deception in the course of the investigative interview in November 2013.
[35] As a fourth cause of action, the plaintiff says the defendant misrepresented to her that full cover for medical conditions would be available under the policy and/or that cover was available by “confirming with the plaintiff’s medical team that the operation and procedures could continue and that they would make payment of the accounts”.
[36] The fifth cause of action again pleads affirmation, the affirmation on this occasion being the telephone call to the plaintiff’s cardiologist confirming the procedure could take place and that the defendant would make payment of the account, coupled with termination of the contract on 14 November. The termination allegedly affirmed that the contract was on foot until that date. There is pleaded to be a consequential estoppel as part of this fifth cause of action.
[37] The defendant says it has tenable defences to each of these causes of action. As I essentially agree that there are tenable defences, I do not set out here the
defendant’s submissions but rather have reflected those submissions in the decision.
4 Bilbie Dymock Corporation Ltd v Patel (1987) 1 PRNZ 84 (CA).
Discussion
[38] As to the first cause of action, the defendant says it is not liable to indemnify the plaintiff under the third policy because she did not disclose to the defendant that she was not a permanent resident of New Zealand, in breach of conditions A.9 and A.21 and/or that exclusion C.10 applies. Condition A.9 sets out a duty to disclose all relevant and known matters. A.21 provides that the policy is “only available to travellers who are permanent residents of New Zealand unless otherwise agreed by us”. C.10 excludes liability related to, or as a result of a claim by a person who is not a permanent resident in New Zealand or does not plan to return to live in New Zealand at the end of their trip.
[39] “Permanent New Zealand resident” is not defined in the insurance contract. Ms Harkess says, and I agree, that the meaning of the expression will or may have to be assessed in the context of the insurance policy as a whole and possibly of other aspects of the factual matrix.
[40] More relevantly, whether the plaintiff was or was not a permanent New Zealand resident either at the time of the third policy being taken out or at the time of the medical event (both being material) will then be a matter of fact. It seems to me that there will be a number of factors relevant to that. Some of these may weigh in favour of the plaintiff’s position and some of them may weigh in favour of the defendant. This was agreed by the defendant at least. By way of example only, it may be helpful to the plaintiff, but not conclusive, that she was a New Zealand citizen; that she still had a “room” and assets in New Zealand; and that her husband was planning to finish his job as a professor in the United States within a specific period, if these factors are correct. It may be helpful to the defendant that the plaintiff had formally resigned her senior position with the Police (but according to her letter, on the basis that she and Mr Warrington had decided to stay in the United States “for a while …”) and that she said to the investigator that Mr Warrington’s home was her “home”. Some apparently relevant factual matters are disputed. Some, as the defendant pointed out, are not yet known.
[41] I do not agree with the plaintiff that the question of whether she was a permanent resident of New Zealand is answered by virtue of her swearing to that fact, and the defendant not having had anyone swear to the contrary.
[42] It follows that the plaintiff has not satisfied me there is no tenable defence as to the first cause of action. To the contrary I consider there is a tenable defence, although the outcome of it is presently unknown.
[43] The second and fifth causes of action are similar, both relating to affirmation of contract. Again I consider there is a tenable defence. First, I consider it highly unlikely that the parties’ agreeing to terminate the insurance contract affirmed the contract. Secondly, the contract expressly provides for the possibility of cover being approved on an emergency basis with the insurer retaining the right to subsequently reject liability. Third, the evidence as to the representations made, relies at least in part, on hearsay evidence with regard to a Dr Mok, the plaintiff ’s cardiologist in the United States. Amongst other problems with these causes of action, Dr Mok would need to provide direct evidence.
[44] Although accorded different labels, the third and fourth causes of action are not dissimilar to the second and fifth. They rely on alleged misrepresentations or deceitful conduct on the part of the defendant. Again, quite apart from their legal basis, these claims can only be determined on the full facts, which are not before the court at present.
Result
[45] I therefore dismiss the application for summary judgment on the basis that I
am not satisfied that there are no tenable defences to the plaintiff’s claim.
Substantive fixture
[46] As I advised counsel, the court is able to facilitate the proceedings by allocating an early fixture. Counsel are to liaise with the Registry as to the earliest three day fixture that can be accommodated and then refer to me a joint memorandum setting out proposed timetabling leading up to that fixture. The parties
have already agreed on the length of the hearing as being three days and agreed that there was no issue with a fixture approximately three months out from today so I expect there to be utmost co-operation and agreement as to timetabled directions. I will arrange for this matter to be listed in the Duty Judge List in one week’s time and I direct counsel to file either a consent memorandum or separate memoranda as soon as possible after this judgment.
Costs
[47] The plaintiff has failed on her application for summary judgment. I canvassed the question of costs with counsel at the hearing as I expressed a likely view that summary judgment was an inappropriate procedure to adopt. Ms Harkess said the defendant sought costs to be ordered now and subsequently filed a memorandum on circumstances where costs should follow the event on a summary judgment application. However, I have decided to reserve costs. The claim is not without merit and I think it appropriate that costs, particularly in respect of matters
such as preparation of affidavits, be considered in light of the ultimate outcome.
Hinton J
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